CONTRACT OF LEASE


This Contract of Lease is made and entered into by and between:

         TECHNOLOGY   ELECTRONIC  ASSEMBLY  AND  MANAGEMENT  (T.E.A.M.)  PACIFIC
CORPORATION, a corporation duly organized and existing under Philippine law with
its  address  at  Electronics   Avenue,  FTI  Complex,   Taguig,   Metro  Manila
(hereinafter referred to as the "LESSOR").

                                      -and-

         THREE-FIVE  SYSTEMS  PACIFIC,  INC., a corporation  duly  organized and
existing  under  Philippine  law with its  address at  Electronics  Avenue,  FTI
Complex, Taguig, Metro Manila (hereinafter referred to as the "LESSEE").

                               - WITNESSETH: That-

WHEREAS, LESSOR is the sole and absolute owner of the two story factory building
on leased land located at Electronics Avenue, FTI Complex, Taguig, Metro Manila,
of which a portion covering an area of 3,888 sq. meters or 41,851 sq. ft. on the
second  floor  indicated in the floor plan  attached  herewith as Exhibit "A" is
available for lease (hereinafter referred to as "leased premises"):

WHEREAS,  LESSEE has offered to lease the described  leased premises from LESSOR
and LESSOR has agreed to lease the described leased premises to LESSEE under the
terms and conditions herein set forth.

NOW, THEREFORE, the LESSOR hereby leases to LESSEE the leased premises described
above,  and the LESSEE  accepts  the same under lease  subject to the  following
terms and conditions:

         1.        TERM

         This Contract of Lease shall begin on March 1, 1995 and shall expire on
December  31, 1999,  renewable  under such terms and  conditions  as the parties
hereto may  mutually  agree  upon.  If such  renewal is agreed  upon,  then this
Contract of Lease shall automatically expire at the end of the stipulated period
without  necessity of notice to the LESSEE and other persons  claiming  under it
shall  immediately  vacate the leased premises upon such termination of Contract
of Lease.

         This  Contract  of  Lease  shall   automatically  be  extended  for  an
additional  twelve  (12) months  provided  that both  Three-Five  (as defined in
Section 3 below) and LESSOR  shall have the right to  terminate  the twelve (12)
month  extension  at any time by giving one hundred  eighty  (180) days  written
notice.
<PAGE>
         2.        RENTALS

         The  monthly  rental  for the  leased  premises  shall be  US$21,384.00
(US$5.50 per square meter). The monthly rental shall be payable in advance on or
before the first day of each and every month at the office of the LESSOR without
necessity of notice or demand.  The LESSEE shall be allowed to withhold from the
rentals  and  remit to the  Bureau of  Internal  Revenue  (BIR)  the  applicable
creditable   withholding  tax  on  rentals  as  required  by  law  and  the  BIR
Regulations.  Payment  shall  be  made by bank  wire  or by a check  drawn  on a
Philippine bank account.  The rent is payable in U.S.  dollars or its Philippine
Peso equivalent on the date of payment.

         3.        PURPOSE AND USE

         The  leased  premises  shall be used  solely  to house  assembly  lines
dedicated  exclusively  to the  assembly  and testing of products for LESSEE and
Three-Five Systems, Inc. (hereinafter "Three-Five"), an affiliate of the LESSEE.
For this  purpose.,  LESSEE shall locate in the leased  premises,  all consigned
equipment and tools belonging to LESSEE which may be necessary for these captive
assembly  lines.  In  this  regard,  LESSOR  hereby  disclaims  and  waives  any
statutory, common law, or other lien, claim or interest, including any so-called
"landlord's lien" it may have against the furniture, fixtures, machinery, and/or
equipment of LESSEE or Three-Five located within the leased premises. The LESSEE
shall have a right to allow the use of the leased  premises to any company which
has a valid assembly or  sub-assembly  contract with Three-Five for the assembly
and testing of products for Three-Five.

         4.        IMPROVEMENTS

         The LESSEE shall secure the prior written approval of the LESSOR, which
shall not be  unreasonably  withheld,  for any  renovation or improvement in the
existing structures,  layout of machinery and equipment or improvements,  in the
leased  premises,  complying with all laws,  ordinances,  rules, and regulations
applicable   thereto  with  the  LESSEE  shouldering  all  costs  in  connection
therewith.  Said improvements  shall exclusively  belong to the LESSOR after the
expiration  of this  Contract of Lease  without  reimbursement  for all expenses
incurred  therefor.  It is  understood  that the LESSEE cannot remove any or all
permanent parts and materials related to the building.

         5.        TRANSFERABILITY

         The LESSEE shall secure the prior written  approval of the LESSOR which
shall  not be  unreasonably  withheld  to  sub-lease,  transfer,  sell,  assign,
mortgage,  alienate or dispose of a portion or whole of the leased  premises and
any rights under this Contract of Lease.
<PAGE>

         6.        DILIGENCE

         The LESSEE  shall take care of the  leased  premises  as if it were its
own. It shall be responsible for the  cleanliness,  ordinary  repairs to and the
day-to-day  maintenance of the leased premises.  LESSOR shall be responsible for
any  extraordinary  or  structural  repairs  to the  leased  premises  not  made
necessary  by the  neglect or default  of LESSEE  and  LESSOR  shall  repair and
maintain the building in which the leased  premises is situate in good condition
and  repair.  The LESSEE  also binds  itself not to store  explosive/combustible
materials,  or dump  garbage,  rubbish  or waste on any vacant  space  within or
outside the leased  premises that may adversely  affect the LESSOR and neighbors
of the leased premises.

         7.        COMPLIANCE WITH LAWS AND REGULATIONS

         The LESSEE shall be responsible  for all acts and omissions done by its
agents, employees, guests and all the other persons entering the leased premises
with its  knowledge  or  consent.  It shall  comply with all  existing  laws and
regulations regarding safety, sanitation,  cleanliness and beautification of the
government. If any future law or regulation requires structural or extraordinary
modifications to the leased premises solely as a result of the particular use of
the  leased  premises  by  LESSEE,  LESSEE  shall  perform  such  structural  or
extraordinary  repairs  and  modifications.  If,  however,  such  future  law or
regulation  is  applicable  to  premises  generally,   LESSOR  shall  make  such
extraordinary  repair or  structural  modification.  The LESSEE  shall  strictly
comply  with all  uniformly  imposed  non-discriminatory  rules and  regulations
provided by the LESSOR  concerning  security,  safety and  sanitation  as may be
updated or modified by the LESSOR at its sole discretion;  provided, however, no
such  rule or  regulation  shall  abrogate  any  right  granted  to LESSEE or to
Three-Five  in this  Contract  of Lease.  The LESSEE is solely  responsible  and
liable  for  the  non-compliance  or  violation  of  all  laws,   ordinances  or
regulations with regard to its business, obligating itself not to use the leased
premises for any illegal or immoral purposes,  and should such unauthorized acts
be committed by the LESSEE in violation of such law or ordinances, it shall hold
the LESSOR free and harmless from any and all  liabilities or  responsibilities,
whether  civil or  criminal  or for any claim  for  damages  or other  causes of
actions,  or  for  that  matter  any  inconvenience,  investigation,  arrest  or
interrogation  regarding any matters concerning said business,  the LESSEE being
solely answerable therefor.

         8.        UTILITIES

         During  the  period  of  lease,  LESSEE  may at its  expense  apply for
telephone connections for the leased premises. The LESSEE may provide at its own
expense a separate  meter  device  which shall  accurately  register  the actual
electrical consumption in the leased premises.

         LESSOR represents that it will pay all utility bills when due.
<PAGE>

         9.        CANTEEN

         LESSEE and its  employees,  agents and guests  shall have access to the
canteen of the LESSOR and the LESSOR agrees to maintain services at least at the
present level.

         10.       SECURITY

         LESSEE's  personnel,   officers,   agents  and  guests,  including  the
personnel,  officers,  agents and guests of the company with a valid assembly or
sub-assembly  contract  with-Three-Five  referred  to in the  last  sentence  of
Section 3 above, shall be listed and screened by LESSOR, however, they shall not
be denied access to the leased  premises after such security  check.  The LESSOR
shall have a right to exclude or prevent the entry of any person who may in good
faith and for good  reason be  considered  a security  risk to the LESSOR or its
personnel or  properties,  provided  that this right shall not be used to defeat
the purpose of this Contract of Lease.

         11.       TERMINATION

         In the event that either party has committed a material  breach of this
Contract  of Lease,  the other  party  shall  have the right to  terminate  this
Contract of Lease;  provided that neither party shall terminate this Contract of
Lease on the  grounds  of a material  breach  without  giving a ninety  (90) day
written  notice  of  termination,  specifying  any  alleged  material  breach or
breaches,  such termination to become effective at the end of said period unless
during said period all material breaches specified have been remedied or waived.
Except for material  breaches as provided in this  paragraph,  this  Contract of
Lease shall not be  terminated  during the term of the assembly or  sub-assembly
contract  with  Three-Five  referred to in the last  sentence of Section 3 above
provided  that such  assembly or  sub-assembly  contract  is with the LESSOR.  A
material breach shall have occurred if LESSEE fails to pay any rental,  electric
bill and other reimbursable expenses when due.

         12.       VENUE

         In case of court action due to any violation of this Contract of Lease,
the losing party shall pay all necessary  expenses  incurred for attorney's fees
and  litigation  expenses  which in no case shall be less than  TWENTY  THOUSAND
PESOS (P20,000.00). It is hereby agreed that the venue of litigation shall be in
the proper courts of Pasig, Metro Manila.

         13.       NO WAIVER

         The  failure of a party to insist upon a strict  performance  of any of
the terms, conditions,  covenants hereof shall not be deemed a relinquishment or
waiver  of any  right or  remedy  that  said  party  may  have,  nor shall it be
construed as waiver of any subsequent breach or default of the terms, conditions
and covenants herein contained,  which shall be deemed in full force and effect.
No waiver by a party  shall be deemed  to have  been made  unless  expressed  in
writing and signed by such party.
<PAGE>
         14.       REAL PROPERTY TAX

         The LESSOR shall be responsible for payment of the real property tax on
the  leased  premises.  The  LESSEE  shall be  responsible  for any taxes on the
equipment used in the leased premises.

         15.       GROUND LEASE

         The LESSOR shall be responsible  for payment of the land lease.  By its
signature  below,  Food Terminal Inc.,  the landlord  under the referenced  land
lease  (hereinafter,  the "Master  Landlord")  agrees that  notwithstanding  any
breach or  default  by LESSOR  under the land  lease,  and  notwithstanding  any
termination of the land lease as result of such breach or default, provided that
LESSEE is not in  material  breach of this  Contract of Lease,  Master  Landlord
shall  honor  this   Contract  of  Lease,   shall  not  disturb   LESSEE'S  (and
Three-Five's)  possession of the leased premises, and shall hold LESSEE in quiet
enjoyment of the leased premises.  In addition,  Master Landlord consents to the
option to prepay  rent  contained  in Section 2 above and the option to purchase
contained in Section 19 below, and represents and warrants to LESSEE that Master
Landlord's  interest in the land upon which the building is situated is free and
clear of all liens and encumbrances.

         16.       SUCCESSOR-IN-INTEREST

         This  Contract  of Lease  shall be valid and  binding on the LESSOR and
LESSEE and all their assigns and successors-in-interest.

         17.       INSURANCE

         LESSOR shall maintain a policy or policies of casualty insurance on the
building in which the leased  premises are located in an amount of not less than
the full  replacement  cost  thereof.  Concurrently  with the  execution of this
Contract of Lease,  LESSOR shall deliver to LESSEE  certificates  evidencing the
existence of such insurance. In the event of any damage to or destruction of the
leased  premises or the building in which the leased premises is located by fire
or other  casualty,  LESSOR  shall,  with all  reasonable  dispatch,  repair and
reconstruct the leased premises and/or the building,  as the case may be, to the
condition  existing  immediately  prior to the  occurrence of such fire or other
casualty.

         18.       QUIET ENJOYMENT

         LESSOR covenants with LESSEE that upon LESSEE  performing and observing
the  agreements  and  conditions on its part to be performed and observed  under
this Contract of Lease,  LESSEE shall and may peaceably and quietly have,  hold,
and enjoy the leased premises and all rights of the LESSEE hereunder without any
manner  of  hindrance  or  molestation  by LESSOR or any  persons  claiming  by,
through, or LESSOR. Notwithstanding the foregoing, LESSOR and LESSEE
<PAGE>

acknowledge  that  until  April 30,  1995,  LESSOR  may  continue  to occupy the
administrative  offices identified as such on the floor plan attached as Exhibit
"A".  LESSOR shall,  however,  vacate such  administrative  offices on or before
April 30, 1995,  and shall  deliver the same to LESSEE broom clean,  and in good
condition and repair.

         19.       OPTION TO PURCHASE

         LESSEE  shall  have and  LESSOR  hereby  grants to LESSEE the option to
purchase  the  building  within the leased  premises is located,  including  the
interest of the tenant  under the  referenced  land lease.  If LESSEE  wishes to
exercise this option,  it shall do so by giving  written  notice to LESSOR on or
before October 31, 1999. The purchase price for the building in which the leased
premises  is located  and the  tenant's  interest  under the land lease shall be
eighty-five  percent  (85%) of the fair  market  value of the  building  and the
tenant's interest under the land lease. Fair market value shall be determined by
the mutual agreement of LESSOR and LESSEE.  The closing of the purchase pursuant
to this option shall take place on, or at,  LESSEE's  election,  before December
31, 1999.  At the closing,  LESSEE shall pay to LESSOR the purchase  price,  and
LESSOR shall  deliver to LESSEE a warranty deed and bill of sale to the building
in which the leased premises is located,  a warranty  assignment of the tenant's
interest under the land lease, together with the consent of the master landlord.

IN WITNESS WHEREOF, the parties hereto have executed this Contract of Lease this
22nd day of February, 1995, at Taguig, Metro Manila.

TECHNOLOGY ELECTRONICS                      THREE-FIVE SYSTEMS
ASSEMBLY MANAGEMENT                         PACIFIC, INC.
(T.E.A.M.) PACIFIC CORPORATION              (LESSEE)
(LESSOR)

BY: /s/ Ceferino F. Bautista              BY: /s/ Randal L. Buness
   -------------------------                 ---------------------
        Ceferino F. Bautista                      Randal L. Buness

ITS:    Senior Vice President             ITS:    Chief Financial Officer
    -------------------------                ----------------------------


FOOD TERMINAL INC.
(Master Landlord)

BY:
    ----------------------------
ITS:
    ----------------------------

<PAGE>
We have read the above  Contract of Lease and agree,  for  ourselves and for our
assigns   and/or   successors-in-interest   in  the   Contract   of  Lease  that
notwithstanding  any breach or default by the LESSOR  under any loans made by us
to LESSOR and  notwithstanding  any  foreclosure by us of the liens and security
interests  securing  repayment of the loans made by us to LESSOR, we shall honor
this Contract of Lease, not disturb LESSEE'S (or Three-Five's)  occupancy of the
leased  premises,  and shall hold LESSEE in peaceful and quiet  enjoyment of the
leased premises. In addition, we consent to the to purchase described in Section
19 of the  Contract of Lease,  and,  if  necessary,  will  release our liens and
security  interests  encumbering  the building in which the leased  premises are
located and the tenant's  interests under the land lease in exchange for payment
of the purchase price described in Section 19 of the Contract of Lease.

RIZAL COMMERCIAL BANKING                     CHINA BANKING
CORPORATION                                  CORPORATION

BY:                                          BY:
   -------------------------                     ---------------------------
ITS:                                         ITS:
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